The world (or at least a substantial part of it, the Brussels antitrust bubble) is waiting for the EU Commission’s guidelines on Article 102 TFEU. How will the Commission enforce the abuse provision in the future? Giorgio Monti, Professor at Tilburg University, attended a stakeholder workshop in Brussels and shares his thoughts here with the readers of D’Kart.

On a cold and grey 13 February, some 120 economists, lawyers, civil society representatives, and academics assembled in Brussels to discuss the Draft Guidelines on exclusionary abuses at a stakeholder workshop organized by DG Competition. There were no journalists, Chatham House rules operated, and the Commission officials were in listening mode. It made for a fruitful series of exchanges reflecting very different views on the nature of Article 102 TFEU and the appropriate role of guidelines.

The venue chosen for the workshop was the Albert Borschette Center, named after the third competition Commissioner whose signature is found in the United Brands decision. Readers will recall the time during which Borschette served (1970-1976) as one of aggressive enforcement against dominant firms: Continental Can, Commercial Solvents, and Hoffmann-La Roche. All decisions which were appealed and where the Court of Justice expanded the role of the abuse of dominance provision. Maybe a message here?

The workshop was organized as follows: the morning breakout sessions focused on some of the fundamental principles animating the Draft Guidelines while the afternoon breakout sessions zoomed in on discrete abuses. Plenaries after each breakout allowed everyone to get a sense of the discussion. I attended the breakouts on competition on the merits (having tried to make sense of this phrase in my submission to the Commission) and on refusals to deal and allied abuses (having just taught some of the cases the week before, this topic was fresh in my mind).

The conversations were balanced, Commission officials chairing the sessions did well to keep most people to two-minute interventions and facilitated a healthy exchange of views. Below, a few personal reflections. 

One point that came back frequently is what should a good guideline look like. Presently the document reads (to me) as a textbook on Article 102 TFEU coupled with an enforcer’s instinct of leaving all options open lest future cases do not fit into the mold (e.g. you might be dominant even below the threshold).  Conversely, might guidelines do more to actually guide firms? Many useful suggestions were pitched about how to make guidelines more effective. At a high level, they should be designed to facilitate compliance with the law, thereby preventing exclusionary conduct at the outset. This calls for a very different approach: directed at identifying risks and more concrete in shaping abuse doctrines allowing for self-assessment. For example, there could be some safe harbors below which firms are free to operate without risk and illustrative examples to explain how general principles are translated into competition law analysis. Granted, each abuse of dominance case is unique and looking at some past cases, a variety of practices often combine to make up an abuse strategy, but some more do’s and don’ts can still be provided.

It took just before lunch for someone to mention the geopolitics of the moment and concomitantly the need for less enforcement because otherwise dominant firms’ incentives to invest will plummet and so will the EU’s industrial policy. Luckily, others recalled that innovation capabilities are not exclusively in the hands of dominant firms. Nevertheless, some difficult choices about how to calibrate EU competition law in the current era have to be made. In particular, because we don’t have a Commissioner for Competition Policy. Rather we have an Executive Vice President for a Clean, Just and Competitive Transition who happens to also have the competition portfolio. What this means for competition policy is explored by many including the Common Market Law Review’s Editorial Comments: Competition Policy in the von der Leyen 2 Commission: Diluted or Integrated?. How much will this allow for greater tolerance of exclusionary conduct in the name of industrial policy remains to be seen. It might just translate in even less enforcement by the Commission and more uncoordinated efforts by national competition authorities. 

Substantively, I think the Commission has a choice to make. Does it embrace that strand of case-law that supports the more economics-based approach so that we look closely at the likely effects of a practice on the market? This line is represented by the Intel 1 and 2 judgments.  Or does it embrace the case-law which continues to insist that the point of Article 102 TFEU is to keep markets open to competition, and thus dominant firms cannot dictate who is eligible to enter any part of the contestable market? A line represented by Generics and Google Shopping.  A practical example of how this might matter: a discount scheme cannot foreclose, says the first camp, unless the coverage is sufficiently vast as to deny entry to an as-efficient rival. Conversely, says the latter camp, any discount offered by a dominant firm that denies space for a new entrant is an abuse, irrespective of coverage.

During the workshop, nobody could agree on what as efficient competitor principle was, but everyone knew that their definition was the right one. Everyone agreed that competition on the merits was a hard notion to pin down, some liked it, most did not. Whether the case-law allows for presumptions also drew competing answers. This substantive discussion in my view is helpful only so far. The real discussion is about the essence of Article 102 TFEU and requires a meaningful conversation with the Court of Justice, the ultimate interpreter of the concept of abuse. It is also about the essence of how markets work: are firms seeking to enter dominated markets opportunistic free riders or the sources of future welfare? Is Article 102 TFEU a rule forbidding only practices that reduce welfare or does it embody an ethical principle of good conduct?

It took till the very end for the suggestion that the Draft Guidelines be put in one of the Omnibuses currently being prepared by the Commission to deliver some EU regulations to the scrap heap. This might yet happen, but the plan seems that there will be guidelines sometime later this year. As someone who experienced a stakeholder workshop in 2006 when the discussion paper was being presented in London, my guess based on what happened then is that the final draft will see some modifications but no major change of direction.

Giorgio Monti is Professor of Competition Law at Tilburg University.